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Lessons Learned From 10 Years of Foreclosure Data


foreclosuresLooking back, what were some of the lessons learned that will help policymakers moving forward? A new report from The Urban Institute [1] talks about one program’s success and shares some of what they learned. NeighborWorks America, the Congressionally chartered nonprofit organization that implemented the National Foreclosure Mitigation Counseling (NFMC) program, identified 4 main takeaways that can be used as guidelines in the future national crisis.

The foreclosure crisis was evident towards the end of 2007 when the number of US homeowners at risk of losing their homes had doubled in one year and those numbers were climbing. In response, Congress launched the National Foreclosure Mitigation Counseling program in December, which helped 2.14 million homeowners by walking them through the foreclosure process. NFMC’s paid counselors helped homeowners in vulnerable communities explore solutions like renegotiating with their lender or exiting a home they could not afford.

First, collaboration is key, stated the report. It may seem obvious, but the faster a consensus is reached on what the crisis is, how to respond and reach shared goals the quicker existing programs can mobilize and get to work. NeighborWorks gathered experts from the field, government agencies, and practitioners on the ground for approving counseling agencies and designing data tracking systems. This enabled them to award $130 million in 60 days, more than 2.5 times their mandated target. In a crisis, funds reaching people in need quickly is a major asset.

Next, the importance of transparency, collaboration, and flexibility. Document everything, and make key decisions public, especially when using government funds. Be attentive to problems that emerge, listen to feedback, and tweak. In addition, monitor and evaluate regularly, have systems in place to report data, evaluate results and show value. And last, set high performance standards and help grantees meet them. The Urban Institute highlighted the strong reporting structure and culture of the NFMC program that enabled NeighborWorks standardized foreclosure counseling practices and paid for thousands of counselors to attend training. Taking these valuable lessons from the past, the industry is now better prepared to respond to a housing crisis in the future.

Read the full story here [2].